The Nikkei newspaper reported on Monday that private equity firm Japan Industrial Partners has made a $15 billion offer to purchase Toshiba Corp. The offer was made just before a looming preferred-bidder deadline.
According to the report, the fund was hoping to secure financing by the end of this month if Toshiba accepted the bid from JIP, which includes more than ten investors, including the utility Chubu Electric Power Co Inc and the financial services company Orix Corp .
According to previous reports, some of Japan’s major banks, whose support is essential to financing the transaction, were alarmed by JIP’s plan to allow Toshiba’s current management to continue in their positions following a buyout.
Based on Toshiba’s current market price, the buyout is anticipated to cost around 2.2 trillion yen ($15 billion), with about 1 trillion yen of that amount coming from investors in the consortium, according to the Nikkei.
The newspaper reported that JIP, Chubu Electric, and Orix will each invest 100 billion yen without citing their sources. Because they anticipated low returns, a number of foreign funds decided not to participate in the bid, it said.
The company could not “answer information about candidates, including co-investors, as it may undermine fair process,” the Toshiba representative said in response to a request for comment.
Prior to Monday’s deadline, it was widely anticipated that JIP, Toshiba’s preferred bidder, would not submit a firm proposal with bank commitments.
The outcome of any deal could have significant effects on Toshiba’s 116,000 employees as well as on national security given that the conglomerate produces both defense and nuclear products.
Since an accounting scandal in 2015, Toshiba, once a titan of Japanese manufacturing, has lurched from crisis to crisis. Years of conflict between management and significant shareholders, many of whom were perceived as foreign activists eager for a buyout, have weakened it.
(Adapted from Nasdaq.com)